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Free Open Source Software Is Costing Vendors $60 Billion?

ScuttleMonkey posted more than 6 years ago | from the good-time-to-be-open-source dept.

Programming 384

conan1989 writes to tell us that a recent report from the Standish Group is claiming that open source is costing the traditional software market somewhere in the neighborhood of $60 billion per year in revenue. "MySQL Marten Mickos has often spoken of 'taking a $10 billion market and making it a $3 billion market.' If you consider that open source has taken out $60 billion of traditional software revenues there will be a bloodletting in the proprietary world soon enough. It's a great time to be an open source company."

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Broken Window Fallacy (5, Insightful)

eldavojohn (898314) | more than 6 years ago | (#23144990)

I pointed this study out yesterday [] during the "Is Open Source the Answer To Giving? [] " discussion and was promptly modded up, down, up, down, ad infinitum (probably because I was trying to merely provide the unpopular side/view of the issue but I digress).

More importantly, you should pay attention to the several insightful and interesting comments that followed which point out French Economist Bastiat's Parable of the Broken Window [] .

Whether you hate it or not, it does no good to ignore this contempt that so much of corporate America holds for open source! Take the time to inform your boss or coworker who claims losses directly to open source efforts.

Re:Broken Window Fallacy (5, Insightful)

someone1234 (830754) | more than 6 years ago | (#23145202)

What is a loss for proprietary software providers is a win for former proprietary software users.
And to be honest, the latter are a bigger group, since the former is soon to be only M$.

and M$ is a vandal. (3, Insightful)

twitter (104583) | more than 6 years ago | (#23145630)

Re:and M$ is a vandal. (1, Interesting)

willyhill (965620) | more than 6 years ago | (#23146322)

Is it safe to assume then that the business model of companies like RedHat, which is centered around providing support for the software they write and/or aggregate is also a form of this "vandalism" you claim "M$" is guilty of? After all, if my livelyhood depends on fixing problems with my code, what incentive do I have to ship it bug-free to begin with?

In any case, Microsoft is hardly the only commercial software vendor in the planet.

By the way, seeing as you've stopped posting with your other four sockpuppet accounts, I'd appreciate a response to my post [] if you have some time.

Re:Broken Window Fallacy (-1, Troll)

derekrodgers (1041724) | more than 6 years ago | (#23145358)

21 GET

Re:Broken Window Fallacy (1)

call-me-kenneth (1249496) | more than 6 years ago | (#23145892)

gratis or libre?

Broken Window Fallacy doesn't apply (5, Insightful)

camperdave (969942) | more than 6 years ago | (#23145978)

I don't think the broken window scenario applies to this situation. Nothing is being destroyed, so the question isn't one of having to buy something vs not having to buy it. The question is buying expensive vs buying inexpensive, which is simple supply/demand economics. I'd go even further, and suggest that the "loss" is fictitious. It is really an overestimate of the sales on the proprietary software vendor's part.

If there is a loss anywhere, it's that only a fraction of the $60 billion is winding up in the pockets of open source developers. Granted, they're in it for the satisfaction of writing well written code, and the peer recognition that comes from that, but it wouldn't hurt for them to see some green from it as well.

Re:Broken Window Fallacy doesn't apply (5, Insightful)

unlametheweak (1102159) | more than 6 years ago | (#23146324)

There is no actual loss, but at the most a theoretical loss. One cannot lose something that one does not have. So yes one could say such losses are fictional because they never really occurred. One could say I lost money during the tech bubble because I never invested in etc when these stocks were rising quite quickly, but in reality I still have what I had before; which is basically no money.

It's all in the spin... (5, Insightful)

msauve (701917) | more than 6 years ago | (#23146006)

If, instead of saying "open source has taken out $60 billion of traditional software revenues," the article said "open source has saved businesses over $60 billion in expense compared to traditional software," don't you think people might view it differently?

Re:Broken Window Fallacy (4, Insightful)

unlametheweak (1102159) | more than 6 years ago | (#23146046)

The Broken Window fallacy is not directly comparable because it assumes "open source" is a negative. Open source software does not directly damage anything; it is however a competitor to other software, and more directly to closed source software. There is however no economic loss occuring (there is no broken window per se). The Broken Window Fallacy states that their are positive unintended outcomes (like the redistribution of wealth from repairing the window, etc) but in this case their is an overall economic loss (the loss of a window that is).

With open source software there is no overall economic loss, but instead there are economic gains (assuming this open source software is in fact free of financial restrictions). The economic gains are seen (at the least) from the adoption and use of this software from people that could not or would not otherwise use such software; and so the standard of living (and quality of living) goes up overall throughout the population. The only downsides are that closed source software has competition (and competition is never a bad thing).

Open source software (as with all things that are added to the 'market') creates wealth; the difference being that with closed source proprietary software this wealth is more concentrated (within the company that creates the software and the customers who successfully exploit this software for their own ends), whereas with FLOSS this wealth is (or at least has the capability of being) distributed more broadly throughout the population. Of course I'm not talking about 'wealth' from a purely monetary perspective, but from the economic perspective as wealth being a 'good' or a 'service'.

Vachel Lindsay on broken windows (1)

dpbsmith (263124) | more than 6 years ago | (#23146064)

"Factory windows are always broken.
Somebody's always throwing bricks,
Somebody's always heaving cinders,
Playing ugly Yahoo tricks.

Factory windows are always broken.
Other windows are let alone.
No one throws through the chapel-window
The bitter, snarling, derisive stone.

Factory windows are always broken.
Something or other is going wrong.
Something is rotten -- I think, in Denmark.
End of the factory-window song."

--Vachel Lindsay

Re:Broken Window Fallacy (-1, Troll)

Anonymous Coward | more than 6 years ago | (#23146164)

This is a really good reason attacking Iraq! Yea, we are public benefactors, trying to make the lives of those Iraq's better! Now, for us, the poor Americans, who's going to do us a favor by breaking our windows? Ah, 911 did that and were we grateful to them? Instead we called them terrorists and sent our troops after them to break their windows. So actually we were helping them more by breaking more of their windows! I feel really good now, thanks to that parable!

DANGER! CAR ANALOGY! (3, Interesting)

iainl (136759) | more than 6 years ago | (#23146278)

Suggesting I didn't buy an enterprise Oracle license because I installed MySQL isn't just a Broken Window Fallacy. For the tiny purpose I needed it for, it's more like suggesting that because nobody has written my Peugeot off, Ferrari are out of pocket the price of a 612 Scaglietti.

Broken Window Fallacy (5, Insightful)

QuoteMstr (55051) | more than 6 years ago | (#23145062)

This idea is an instance of the broken window fallacy [] . If the money had to have been spent on proprietary software, it wouldn't have been used for other things. In the end, FOSS software is a win for us all.

Re:Broken Window Fallacy (1, Interesting)

russotto (537200) | more than 6 years ago | (#23145246)

It's not quite a broken-window fallacy. Yes, if the money had to be spent on proprietary software, it wouldn't have been spent on other things, but that's still good for the software companies. A spate of broken windows doesn't help the economy as a whole, but it may help the glazier who repairs them.

Re:Broken Window Fallacy (2, Interesting)

eldepeche (854916) | more than 6 years ago | (#23145506)

...which would be the entire point of the broken window fallacy: Looking at the benefits to the party getting paid without realizing the opportunity cost to those who do the paying.

Non Free Vendors are also Vandals. (3, Informative)

twitter (104583) | more than 6 years ago | (#23145580)

One of the variants of the parable has the glazier paying people to break windows in the first place. Those are more accurate analogies to the non free software world. NDAs for simple things like text formats are a form of vandalism, especially when they are backed up by hardware NDAs, software patents and other nonsense. The whole market is still suffering from mistakes made back in the 1980s and it's a good thing to see the mistake coming to an end. Every dollar saved by free software is one that won't be used to screw you later.

Re:Non Free Vendors are also Vandals. (3, Funny)

MrNaz (730548) | more than 6 years ago | (#23145830)

This is Slashdot. We know that there is no need to pay people to break Windows. It was already broken when we got here.

Creation of Wealth (5, Insightful)

Brain-Fu (1274756) | more than 6 years ago | (#23145440)

In theory, money exists merely to facilitate the barter system by providing an abstract representation of wealth. We tend to associate a high dollar velocity with wealth creation, though the two are not really the same thing.

Open Source software is, by any reasonable definition, valuable. The individual programs are useful products that people want. Their existence makes the community (in this case, the whole planet) more wealthy. Therefore, open source is not the value-sink that its competitors would dress it up as being.

Re:Broken Window Fallacy (4, Interesting)

tgatliff (311583) | more than 6 years ago | (#23145688)

Exactly.. Modern day business does not see newer and efficient designs are better... They see it as a threat to their business..

OSS from my experience only works in mature marketplaces. Meaning, you do not see OSS products going after fast moving software products such as Solidworks, etc... You only see it in mature slow moving companies... Meaning, OSS is just capitalism at work. :)

Re:Broken Window Fallacy (1, Interesting)

Anonymous Coward | more than 6 years ago | (#23145816)

You're absolutely right. But I think a better question is the following: how much of that newly available extra money is going into software? If the answer is "not much", it's possible that free software is slowing progress in software while transferring that value somewhere else.

The Fallacy Fallacy (4, Interesting)

fm6 (162816) | more than 6 years ago | (#23145848)

I think both you and the Standish Group are making a mistake I call the RIAA fallacy. That's the assumption that every time somebody gets something for free (or very cheaply) it subtracts one from sales of a more expensive equivalent.

The truth is that cost often determines whether something gets purchased at all. If new cars are too expensive, people will make their existing cars last a year or two longer. (Or not replace their horse-and-buggy with a car, an insight that made Henry Ford rich.) People didn't even see the need for a personal computer until they became cheap enough for everybody to afford one. And if upgrading its IT is too expensive, a company will very likely make do with its existing IT.

Re:Broken Window Fallacy (1, Insightful)

Anonymous Coward | more than 6 years ago | (#23145934)

In fact it would be beneficial to argue that FOSS is helping the economy by circulating the money that would otherwise have been given to large companies.

Paying MS $200 has some benefit, but given the size and bankroll of MS that money probably won't make it into the economy any time soon.

If you put Linux on the system and take the same $200 and give it to the workforce, or buy supplies, or other items from smaller companies, that money will start circulating faster.

So what the study should really say is that $60B has been circulated into the economy that would otherwise have stagnated in the accounts of a large and distant corporation.

Yeah for FOSS! Without which the economy would be in even worse shape.

Alternatively... (0)

Anonymous Coward | more than 6 years ago | (#23145078)

It's making the rest of us $60 billion richer. Of course, spread around 6 billion people, that's only $10 each, but yay us!

Only the tip of the iceberg (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#23145094)

If you assume that the takeup rate of OSS will only increase exponentially, potential earnings will be hit much harder [] in the future.
CAPTCHA: crafty

Re:Only the tip of the iceberg (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#23145378)

You mean, there is a browser solidity test you can take at [] ?

Re:Only the tip of the iceberg (0, Offtopic)

MttJocy (873799) | more than 6 years ago | (#23145482)

Don't click the above link, is a GNAA troll site.

Re:Only the tip of the iceberg (1)

MightyYar (622222) | more than 6 years ago | (#23145964)

And if you take a look at the javascript, it's all the confirmation we need that the GNAA trolls are pretty stupid (and probably 13-year-old kids).

Stupid. (5, Insightful)

SatanicPuppy (611928) | more than 6 years ago | (#23145098)

This kind of "Look how much money we're not making" is stupid regardless of who is espousing it. They're trying to prove a negative, and monetize a handful of nothing, and the sick part about it is that they honestly think that they're not completely crazy.

This is just like the RIAA trying to put a dollar figure on money lost to filesharing, or the press trying to put a dollar figure on "productivity loss" based on this or that sports event. They just need to get a freaking life, and start trying to measure things that exist.

VP-speak is annyong. "Costing??" (4, Insightful)

JonTurner (178845) | more than 6 years ago | (#23145292)


It's not costing anything. It's competing. Very effectively, I might add.

In the same frame of mind, I'd be curious to know if this group also considers IT a "liability."

Re:Stupid. (5, Funny)

Karem Lore (649920) | more than 6 years ago | (#23145452)

ME TOO! I have lost $94 million dollars last Friday ,and countless billions over the last few years, due to some other euromillions lottery players...

Re:Stupid. (1)

Col. Klink (retired) (11632) | more than 6 years ago | (#23145620)

And just how much money have buggy whip manufacturers lost due to the automobile?

Re:Stupid. (1)

keysersoze_sec (1229038) | more than 6 years ago | (#23145650)

I'd say "Stupid and Expensive" This awesome report only costs $1000 per copy. (quoted from TFA: [] )

Re:Stupid. (1)

canajin56 (660655) | more than 6 years ago | (#23146012)

Wow, that is expensive. So given that it is such a valuable item, how much money is your negative comment costing the economy? Why do you hate capitalism and freedom???

Re:Stupid. (1)

iainl (136759) | more than 6 years ago | (#23146062)

And by you lot telling people it's a load of crap for free, you're costing them a fortune in missed sales. Shut up, or at least charge over $1000 for the information!

Re:Stupid. (2)

MrNaz (730548) | more than 6 years ago | (#23145914)

Don't be ridiculous. Of course its true. It's just like the evil purveyors of that monstrosity that they call the "car" has put many a good, hard-working farrier out of business. Please, someone think of the farriers!

Re:Stupid. (1)

call-me-kenneth (1249496) | more than 6 years ago | (#23145932)

a $60,000,000,000 hole in public company's bottom lines is definitely a something, not a nothing.

"Revenue" (4, Interesting)

ookabooka (731013) | more than 6 years ago | (#23145118)

I wonder how this revenue is calculated. Is it done the same way that RIAA calculates lost revenue? If I install Open Office on my laptop, that doesn't mean that I would have bought proprietary software and put that on there if there were no Open Source options. Plus, is this factoring in the lower cost to develop software by using open source utilities?

Re:"Revenue" (2, Interesting)

immcintosh (1089551) | more than 6 years ago | (#23146326)

If I install Open Office on my laptop, that doesn't mean that I would have bought proprietary software and put that on there if there were no Open Source options.
To be fair, I think that's a much safer assumption in this case than it is for music. Music is a luxury good, while word processors (and most other open source software) aren't.

That said, all this latest round of petty bitching really amounts to is, "People are spending money on other goods and resources, when they clearly should be spending it on us!" There are a lot of people out there who simply can't seem to cope with software-as-product becoming a thing of the past. The future of software is pretty clearly turning into software-as-service (just take a look at the license to print money that World of Warcraft has turned into).

In the end (2, Insightful)

TheLeopardsAreComing (1206632) | more than 6 years ago | (#23145136)

In the long run, it has balance out somewhere. Money doesn't disappear. It's the old overused notion of squeezing a balloon again... we have to figure out where the bulge is.

pathetic (4, Interesting)

Anonymous Coward | more than 6 years ago | (#23145144)

Will they NEVER stop whining.

It's pathetic.

Oh, my God, we need more Microsoft programmers.

Oh, my God, we need more h1b visa workers.

Oh, my God, the programmers we displaced are competing with us and winning.

Re:pathetic (1)

mikael (484) | more than 6 years ago | (#23145740)

Every so often, there's a corporate interview in the business section of the newspapers, where the journalist talks to CEO or HR manager about the company. In the past, they would be boastful about how they would get 25 qualified engineers applying for each position and that they would only hire one or two. At least until the interviewer asked what happened to the other twenty or so. Do they disappear or don't they end up working for your competitors instead?

Perhaps a better way of phrasing it would be (4, Insightful)

toppavak (943659) | more than 6 years ago | (#23145152)

that open source is saving those vendors' customers $60 billion.

Exactly (1)

geoffrobinson (109879) | more than 6 years ago | (#23145510)

Economics should be viewed in a dynamic way. People and companies saved money and used that money to either save, build an addition to their house, buy an iPod, hire new employees, etc., etc.

Re:Perhaps a better way of phrasing it would be (1, Insightful)

Anonymous Coward | more than 6 years ago | (#23145660)

that open source is saving those vendors' customers $60 billion.
Not really. If proprietary software vendors lost $60 billion, then everyone else has won *more*. Because software at licensing cost zero will be used more than software at licensing cost x. Ergo the total value of the open source s/w replacing proprietary software has a higher total value.

ObHeinlein (1)

sconeu (64226) | more than 6 years ago | (#23145944)

It's appropriate here

There has grown up in the minds of certain groups in this country the notion that because a man or a corporation has made a profit out of the public for a number of years , the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary public interest. This strange doctrine is not supported by statute nor common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped ,or turned back, for their private benefit.
-- The Judge in Life-Line

Re:Perhaps a better way of phrasing it would be (1, Insightful)

call-me-kenneth (1249496) | more than 6 years ago | (#23146022)

It looks like nearly everyone hear is jumping to the conclusion that TFA is saying "...and this is a BAD THING!" which clearly, it's not. Putting proprietary companies out of business (as everyone's pointing out) is *obviously* a good thing. Enough with the knee jerk "OOoh, they're attacking us! they're attacking us!!" mentality. Guess what, THEY'RE NOT!


Re:Perhaps a better way of phrasing it would be (1)

fm6 (162816) | more than 6 years ago | (#23146028)

Not necessarily. Free software isn't really free: you have to pay somebody to maintain it. Which means that that some of the $60 billion that customers save gets spent on support contracts.

What you really have is proprietary software vendors who sell application licenses and support contracts competing with FOSS vendors who give away applications licenses and sell support contracts. It boils down to competition on price.

$1000/copy (1)

betterunixthanunix (980855) | more than 6 years ago | (#23146162)

Perhaps the authors of the report mean to vaporize those savings by charging $1000 per copy of the report? I'm not even kidding, trying to find the actual report resulted in my confronted by that price...

Another way to look at it (1, Interesting)

Anonymous Coward | more than 6 years ago | (#23145174)

Shouldn't it read: "Free Open Source Software Is Saving Consumers $60 Billion"?...

Wheelchair industry (4, Funny)

Dan East (318230) | more than 6 years ago | (#23145218)

The wheelchair industry would be a $10 trillion dollar a year industry if people didn't have legs. But since people are indeed born with legs, it is a moot point.

Re:Wheelchair industry (3, Insightful)

Sciros (986030) | more than 6 years ago | (#23145936)

Oh man you gave me an idea for a NEW JAMES BOND MOVIE PLOT! A villain who secretly owns controlling stock in big wheelchair manufacture/sale companies engineers a virus that keeps fetuses from fully developing legs. This way he would have at least an entire generation that would buy his wheelchairs, and he'd make a BAZILLION dollars! Also he would have a wheelchair-bound henchwoman who is really hot and at the end it turns out she can actually walk (and fight using mad karate skills) but James Bond knew this all along because he slept with her twice already.

Genius plot.

Partial dup? Wasn't the $60B debunked yesterday? (2, Interesting)

xxxJonBoyxxx (565205) | more than 6 years ago | (#23145224)

Partial dup? Wasn't the $60B debunked yesterday? Anyway, as a software vendor that depends on MySQL, I think this "open source is cool" story was just put out there by Sun's PR team to deflect attention away from their accidental "even more of MySQL will be pay-to-play" in the future announcement. Hey MySQL, thanks for the help getting my product to market, but now it's time for some vendor independence; buh-bye.

Re:Partial dup? Wasn't the $60B debunked yesterday (2, Informative)

Bill, Shooter of Bul (629286) | more than 6 years ago | (#23145800)

Good job not doing any research at all. Despite the sensational headline a few days ago, Nothing that is Open source in MySql will be close sourced in the future. They will introduce a few add on backup products that will not be open, none of which exist today. So if you are happy with the current MySql, nothing is going to change. You'll still have full access to the course code you have today and any and all improvements that come in the future.

Open Source Contributes $60 Billion to Economy (0)

Anonymous Coward | more than 6 years ago | (#23145232)

The headline for the glass is half full viewpoint.

New Math (4, Insightful)

Dunbal (464142) | more than 6 years ago | (#23145268)

That would be "costing other software vendors" in the same sense that the RIAA and the MPAA are "losing money from piracy". It makes the HUGE assumption that everyone who uses open source software is someone who would otherwise have purchased the "traditional" software. This is simply not true. However human beings are very good at pulling numbers out of their asses, and since politicians are used to talking shit, they readily believe these numbers.

      Wow, let's make a law that outlaws open source software, to "protect" the "traditional" software industry. At the same time it will fight terrorism (because terrorists use open source software) and help the children (because open source is BAD). Yes you sarcasm impaired mods, learn to spot it when you see it.

Re:New Math (4, Interesting)

erroneus (253617) | more than 6 years ago | (#23145608)

You beat me to it. The presumptions made by the statement are staggering.

One of the presumptions I find most distasteful is the presumption that proprietary/commercial software vendors are somehow entitled to income from sales. I have issues with such business models in the first place. I don't believe they are entitled any more than I am entitled to a paycheck simply because I offer my services to the highest bidder as an employee. I get paid when I do work.

F/OSS doesn't "cost" other business money and doesn't cause losses any more than natural competition between commercial competitors causes loss or "costs" a business its 'entitled income.'

The slant of the statement is against F/OSS, but it's making a terrible argument against it.

Among the things I like about F/OSS is that 'providers' of such are offering service and assistance to support the use of software they do not control. The user is in control which means there's no vendor lock-in and less incentive for the vendor to abuse the customer. This creates a business model where the vendor will actually have to WORK or offer something of value to the customer. In the case of commercial software vendors, the incentive is to do as little as possible and to guarantee NOTHING (read a EULA).

What F/OSS does is cause competition that is hard for proprietary/commercial vendors to beat. That's "competition" and not a "cost" or a "loss."

Re:New Math (1, Informative)

Anonymous Coward | more than 6 years ago | (#23145634)

That's just it, it's not costing anybody anything, there'd be an additional $60 billion inflationary pressure on the economy without F/OSS.

I could just as well say that not winning the lottery every week is "costing" me billions a year. Small analyst groups releasing sensationalist reports at $1000 a copy are costing industry far more than open source.

yikes (1)

dodgedodge (166122) | more than 6 years ago | (#23145296)

The cluelessness is simply astounding.

corepirate nazi execrable going DOWn &/or out (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#23145304)

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as there are no benefits, just more&more death/debt & disruption. fortunately there's an 'army' of light bringers, coming yOUR way. the little ones/innocents must/will be protected. after the big flash, ALL of yOUR imaginary 'borders' may blur a bit? for each of the creators' innocents harmed in any way, there is a debt that must/will be repaid by you/us, as the perpetrators/minions of unprecedented evile, will not be available. 'vote' with (what's left in) yOUR wallet, & by your behaviors. help bring an end to unprecedented evile's manifestation through yOUR owned felonious corepirate nazi glowbull warmongering execrable. some of US should consider ourselves somewhat fortunate to be among those scheduled to survive after the big flash/implementation of the creators' wwwildly popular planet/population rescue initiative/mandate. it's right in the manual, 'world without end', etc.... as we all ?know?, change is inevitable, & denying/ignoring gravity, logic, morality, etc..., is only possible, on a temporary basis. concern about the course of events that will occur should the life0cidal execrable fail to be intervened upon is in order. 'do not be dismayed' (also from the manual). however, it's ok/recommended, to not attempt to live under/accept, fauxking nazi felon greed/fear/ego based pr ?firm? scriptdead mindphuking hypenosys.

consult with/trust in yOUR creators. providing more than enough of everything for everyone (without any distracting/spiritdead personal gain motives), whilst badtolling unprecedented evile, using an unlimited supply of newclear power, since/until forever. see you there?

"If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sin, and will heal their land."

meanwhile, the life0cidal philistines continue on their path of death, debt, & disruption for most of US. gov. bush denies health care for the little ones;

whilst demanding/extorting billions to paint more targets on the bigger kids;

& pretending that it isn't happening here;
all is not lost/forgotten/forgiven

(yOUR elected) president al gore (deciding not to wait for the much anticipated 'lonesome al answers yOUR questions' interview here on /.) continues to attempt to shed some light on yOUR foibles. talk about reverse polarity;

Re:corepirate nazi execrable going DOWn &/or o (0)

Anonymous Coward | more than 6 years ago | (#23145524)

Oh, just fuck off and die.

Seriously: why doesn't slashdot have some kind of a way to filter this ANNOYING BULLSHIT OUT.

Figure it out, because the next time I see this, I'm going to digg. The commentary is about as insightful, and often the reporting is less biased.

Re:corepirate nazi execrable going DOWn &/or o (0)

Anonymous Coward | more than 6 years ago | (#23145576)

Are you too dense to ignore him or use the comment threshold filters? Yeah, go to digg. Like I give a shit. -CmdrTaco

COMPLETELY 100% WRONG (4, Insightful)

loafula (1080631) | more than 6 years ago | (#23145306)

The title should read "Free Open Source Software is SAVING CONSUMERS $60 Billion" It is not costing vendors a dime.

Bullshit (4, Insightful)

sm62704 (957197) | more than 6 years ago | (#23145318)

A lost sale is not a cost. You could just as easily say that Microsoft is costing Red Hat money by selling server OSes. That would be as ludicrous.

I imagine that the local bands selling their CDs for five bucks apiece is costing the RIAA labels tons of money too. Know ahet? I consider it a GOOD thing.

I also consider it a GOOD thing that free software "costs" Microsoft money. Because, you know, I hate their software, I hate their business methods, and frankly I don't care too much for Gates and Ballmer.

Your bad is my good. Costing you? Well GOOD! Well done, FOSS! Here's to you kind sirs!

A $60 billion double-edged sword. (4, Insightful)

WibbleOnMars (1129233) | more than 6 years ago | (#23145320)

You can say anything with statistics, particularly when you're trying to show how much something costs.

I can take that exact same stat, and say that it's given businesses a $60 billion saving. Just think how much more competitive our businesses are now that they're saving all that money!

So you see, it's a double-edged sword: a cost to one person is a saving to another.

The fact is that when you start talking about that sort of money, it's never actually as clear-cut as a single statistic can make it sound. Anyone who does try to boil it down to a simplistic headline like that is almost certainly trying to put their own spin on it. (and yes, that includes me)

It'd be nice to see the study... (2, Informative)

mikesd81 (518581) | more than 6 years ago | (#23145324)

Okay first off, a better article than link in summary: Marketwire article []

Now as for seeing the actual study: The Standish Group's "The Trends in Open Source" report is available free of charge to Standish Group subscribers. Non-subscribers may obtain copies directly from The Standish Group at: [] for $1,000 per copy.

Your IT department. (1, Insightful)

Anonymous Coward | more than 6 years ago | (#23145372)

Does your company have an internal IT department that maintains and repairs PCs? Then that company is stealing business from another company that is is the business of maintaining and repairing computers.

Does your local city government have a utility department that installs and repairs water pipes? Then that city government is stealing business away from local plumbers.

Do you cut your own hair or shave your own beard? Then you are stealing business away from your local barbers.

Absurd, isn't it?

Traditional? (0)

Anonymous Coward | more than 6 years ago | (#23145394)

I really object to the phrase "traditional software revenues". Open source has as long a "tradition" as for-profit software. Longer even?

Re:Traditional? (2, Insightful)

MightyMartian (840721) | more than 6 years ago | (#23145582)

Well, open source itself is a reasonably new name, but certainly public domain or at least freely distributable software has been around for decades, and so far as I'm aware, has popped up in just about every operating system during that time.

What's in a name? (1)

argent (18001) | more than 6 years ago | (#23146040)

What's in a name? That we call our code
By any other name would smell as sweet.
So Open Source would,
        were it not Open Source call'd,
Retain the same perfection which it's owed
Without that title...


Another example of... (1)

dogsbreath (730413) | more than 6 years ago | (#23145416)

...a market whose value was inflated beyond what the economics should dictate. eg: music/video distribution or long-distance telephony. The technology has matured and there is critical mass in distributed knowledge experts (ie slashdot readers), ubiquitous access to high speed data communications, and cheap hardware. The "$60 billion" value sounds like "a street value of" my 2c

How many businesses has it allowed though (1)

agristin (750854) | more than 6 years ago | (#23145426)

The cost is a fallacy. But even assuming that was true, how many industries does Open Source allow?

ebay? Amazon? Google? Redhat? IBM? Many other shops gain efficiency from using Opensource (certainly in finance and healthcare).

Or to make a bad car analogy: How many billions in buggy whip manufacturers or buggy makers were lost to the automobile? hmmm? Or is the efficiency of the car a net gain on the horse drawn carriage?

Re:How many businesses has it allowed though (1)

geoffrobinson (109879) | more than 6 years ago | (#23145574)

Well, there is less horse crap in the streets. That's a big net positive. Nothing like fecal matter in the streets and poor sanitation to reduce life spans.

interesting when compared to the production cost (1)

dermond (33903) | more than 6 years ago | (#23145432)

e.g. debian (here with sarge so the numbers are not completely up to date): 230 MLOC = about 9 GigaDollar

when the report says that this costs the vendors about 60GigaDollar/year it just shows how extremly inefficient comercial production in the capitalist system is.


They have only themselves to blame... (4, Insightful)

KC7GR (473279) | more than 6 years ago | (#23145434)

Specifically, the closed-source software vendors.

Consider: No matter how much marketing you have, it is ultimately up to the end user of a product to decide if they've gotten the value they expected to get. If said user finds that the closed-source product they paid (possibly) big bucks for isn't worth the media it was recorded on, they're going to cut their losses and try something else.

Alternatively, there are many small businesses that simply can't afford the kinds of prices that closed-source vendors often charge. I know this for a fact, because I'm one of those tiny businesses! If not for FreeBSD, [] Apache, [] and Postfix, [] to say nothing of the surplus hardware market, I would never have been able to get my Internet presence [] off the ground.

It's not just Freeware, either. How many of us have found low-cost Shareware products to be incredibly useful for the stuff we do, when comparable commercial products would have nearly required a second mortgage? Hex Workshop [] is, I think, a great example.

If that $60 billion figure is accurate, the commercial software vendors have no one but themselves to blame. Oh, there are some good values Out There, yes, but I think they've been largely drowned out by the flood of questionable products that are turned out with far more marketing than quality engineering.

Happy tweaking.

Not only the software vendors are suffering. (5, Funny)

yet-another-lobbyist (1276848) | more than 6 years ago | (#23145436)

We just completed a study for a company selling bottled oxygen: the free availability of air on the planet causes them losses in the neighborhood of $866 billions in revenue -- annually!

So, open FOSS is saving companies $60 Billion? (1)

Xanthvar (1046980) | more than 6 years ago | (#23145468)

Maybe I am being naive about this, but the statement "Free Open Source Software Is Costing Vendors $60 Billion" could be phrased as "Free Open Source Software Is SAVING Companies $60 Billion." I would loosely say that the original statement could be correct, after all, how much would it cost to host a site if it wasn't for Apache, Bind, and Sendmail? Those three apps where the foundation of the Internet and are still the power houses today (well, ok, maybe not Sendmail so much on the enterprise level). Companies can take this money and use it for other products and investments. It sounds like a win win situation for most organizations... poor M$... however will they make money?

And how much...? (3, Interesting)

OpenSourced (323149) | more than 6 years ago | (#23145500)

Has anybody done an study on how much is generating for the users. Of course we have those same 60 billions saved. But I mean not only by direct savings in licenses, but by novel uses in places where licensed software would be uneconomical, new business that could not have been created otherwise, etc.

Another Fallacy (5, Interesting)

w3woody (44457) | more than 6 years ago | (#23145546)

Another fallacy that is often used in reports like this or reports on software piracy is the idea that every copy that is floating out there for free would have been paid for if the software was somehow not available for free--either legitimately through FOSS or illegitimately through piracy.

That's simply not true.

For example, I can download Apache Derby for free and have a SQL engine for my various projects. Had Derby and MySQL and the like not been available, I wouldn't go out and buy a SQL product--chances are, I'd home grow my own custom database. For many of my projects SQL is overkill, but because its free, I may as well use SQL than a couple of fixed-width flat files--even though fixed-width flat files would probably work just fine.

Back in the 80's I knew a fellow who collected pirated software. He never used the software--he just collected it because he thought it was cool. Realistically, had it been impossible for him to collect software he would have never bothered. So realistically speaking while he had thousands of dollars of pirated software on his computer, because he never used it or had any need for the software he copied (it was just a weird hobby of his), he would never buy the software even if it was impossible for him to otherwise obtain copies. So he never represented a sale to the software makers whose wares he was copying.

One also has to wonder what economic benefit has arisen from FOSS. While its true that, for example, I'd hate to go into the database business--it's a complicated business and there is no money to be made because of MySQL and Derby and other free database engines out there--end-user applications seem to be thriving. "Infrastructure" software--stuff like databases and web servers and the like have become free, and going into a business to sell a $10k software solution to compete against Apache Tomcat would be silly. But on the other hand, how much value has been built on top of that infrastructure that simply wouldn't exist if that infrastructure was expensive and the barrier to entry high?

Somebody would have written it (1)

tjstork (137384) | more than 6 years ago | (#23145850)

Had Derby and MySQL and the like not been available,

Somebody would have written a free-ish SQL had not the likes of MySQL been available. FOSS developers aren't really good innovators(*) but they are darned good engineers and implementors and somewhere out there, somebody will be making what starts as a free clone of some sort of a popular RDBMS, and then evolves its own philosophy.

(*) By that, I mean, FOSS people aren't going to come up with some literary vision of computing, but, once they have a spec, they can write you a good one.

Re:Somebody would have written it (2, Insightful)

jedidiah (1196) | more than 6 years ago | (#23146034)

People in general aren't great innovators. Most "best of breed" products are just
rehashes of someone else's idea. They're cloned or bought from others who may or
may not have had any part in "innovation" either.

Innovation is just a buzzword used to sell pointless upgrades and justify
uncivilized business practices.

OMG these terrorists must be stopped! (1)

BlueshiftVFX (1158033) | more than 6 years ago | (#23145598)

we must put an end to these terrorists! they are stealing our freedoms!... uh to sell you stuff and get rich... these do gooders.. I mean no gooders, must be punished for trying to do this to our profits! it's theft plain and simple!

Let the market decide (1)

petes_PoV (912422) | more than 6 years ago | (#23145666)

Whether to adoopt FOSS is a choice that organisations have - no-one forces them to use it, or to purchase non-free tools.

The main point is that it provides an alternative. So far as industry goes, the lifetime cost has nothing to do with the purchase price, it's embedded in the need for support, the cost of making changes, training (whether explicit, or implicit) and the platforms needed to run it over the software's life.

For these reasons the choice to go with software they can download for free, as opposed to a package that may cost 4 or 5 figures is usually never made on up-front price considerations.

Once the non-FOSS industry realises that it's quality, the ability to do the job and the availability of people who can use it effectively, rather than what the sticker on the front says - then they'll wake up to how they can really make successful software.

In other news... (0)

Anonymous Coward | more than 6 years ago | (#23145712)

Free Open Source Software Is Saving Buyers $60 Billion

when does it stop becoming a market? (1)

Zombie Feynman (1276800) | more than 6 years ago | (#23145714)

i'll bet that in the beginning there was a market for electricity, too. and that it persisted until everyone needed it, and the barriers-to-entry were many and costly. and then it became public. when does this happen with operating systems? or is this when business attempts to take ownership of even those things that are, or should be, public? this is when 'the public interest' has to mean something. this is when privatization should be working in reverse. this is when governments need to represent the people, and not the conglomerates.

Maybe (1)

alx5000 (896642) | more than 6 years ago | (#23145718)

MySQL Marten Mickos has often spoken of "taking a $10 billion market and making it a $3 billion market."

Maybe it was not worth $10 billion to begin with. Should we outlaw washing machines to push laundries forward, then? What about refrigerators taking away all the ice-sellers' market?

The figure is merely a testament to value (3, Insightful)

Starky (236203) | more than 6 years ago | (#23145724)

Of course, that means the open source vendors are providing over $60 billion of additional value to customers, who are able to divert whatever would be spent on proprietary software to more productive use.

In other words, it is making the overall market more efficient. That's just Economics 101.

For those who try to spin this as some sort of problem, can you imagine if a single company owned a patent granting them exclusive rights to produce what Apache provides for free? The gains to said company would pale in comparison to the astronomical loss to the overall marketplace.

Re:The figure is merely a testament to value (1)

bigstrat2003 (1058574) | more than 6 years ago | (#23146296)

I fail to see how that's the case. Company X has a monopoly on something that would be freely available otherwise, so company Y, rather than spending $0 on the software, spends $Z, taking that money out of some other part of their budget. The cost to the rest of the market is, then, exactly $Z. Furthermore, the cost to the market as a whole should be $0, because it doesn't matter to the big picture where, exactly, the money is being spent.

I haven't studied economics, so I may be way off, but it seems really simple and straightforward to me.

It's more of that MBA / Marketing math (1)

Whuffo (1043790) | more than 6 years ago | (#23145764)

They claim a 60 billion dollar loss - but I would pose this question: how can you lose something that you never had?

It is, after all a free market. Consumers are free to judge the competing products on their merits and those consumers are selecting open source products more and more. This is what competition is all about, right? So if those traditional software companies would like to remain competitive they'd better get busy and develop products that suit the market's desire.

Those traditional software companies are finding themselves in the same situation as the music companies, the motion picture companies, and many others. These companies were created to package / distribute items that were scarce in society. The production process required special equipment / facilities, so there was a high cost for anyone else to enter the business.

This worked well for those companies until the information revolution put a powerful computer at nearly everyone's disposal - and connected it to a world-wide network. Since all the products mentioned here can be represented as digital data - this means that everyone can produce, package, and distribute these items at little or no cost. This breaks those traditional business models; what once was scarce is now plentiful.

The information revolution is still in progress; much corporate blood is yet to be spilled. Those companies which hold fast to the old ways will not survive, their attempts to make what is plentiful scarce will not be successful in the long term. There's still hope for some of them, though - if they can adjust to the new reality and break loose from the "new coat of lipstick on the same old pig" mentality there will be a place for them.

Good. (1)

jpellino (202698) | more than 6 years ago | (#23145780)

Disruptive technology (OK in this case a biz model) is always a motivator for innovation.

I'd rather the big boys were competing with $0 than within 10% of "what we choose to charge".

I love my OSX but I want Ubuntu etc. breathing down the necks of Mac and Win. I'll either switch at some point or get a better functionality or value in an OS out of one of those.

Stupid (0, Redundant)

Pascal Sartoretti (454385) | more than 6 years ago | (#23145946)

And in related news, the oil industry claims that bicycles are costing them 100 B$ a year of lost revenue in the US alone.

In other news ... (3, Insightful)

Rhabarber (1020311) | more than 6 years ago | (#23145962)

- Non-Smoking is Costing Toback Industry $1200 Billion.
- Healthy Food is Costing McDonalds $4.2 Trillion.
- Singing is Costing RIAA $5.4 Quadrillion.
- Islam is Costing Jack Daniels $43 Billion.
- You not Giving Me You Money is Costing Me $120.000.

You name it ... (f*&k cnet btw.)

Wiping tear. (1)

Fantastic Lad (198284) | more than 6 years ago | (#23146092)

"Singing is Costing RIAA. . ."

I'm still laughing while typing this response. Thank-you!


$60B loss for one is a gain for everyone else (1)

maynard (3337) | more than 6 years ago | (#23145972)

Hi! Do you enjoy paying taxes? Probably not. Especially if you happen to think most of the money confiscated for taxation goes to wasteful spending. It doesn't matter if you would happen to prefer cutting military spending over entitlement spending, or entitlement spending over military spending: one thing is for sure, most every citizen doesn't want to waste taxpayer money. And most every government appears hell-bent on extracting taxes for worthless purposes.

So why are we listening to these private companies whine about not collecting enough revenue from their product lines? Isn't it the same thing? That is: does it really advantage all economic players to pay more for a product than one must? Isn't that just throwing money away on worthless consumption as well?

Or is this yet more of that 'have your cake and eat ours too' bullshit that seemingly pervades the whole nexus of business / government interests? Because one thing is for sure, if individuals can't set the price of their own products and creations - even if that price is zero - then the one thing we don't have is a "free market". -M

From a /.ers sig (1)

JrOldPhart (1063610) | more than 6 years ago | (#23146000)

Talking to your neighbor over the fence is depriving a phone company of income.

Open Source actually does have serious problems (1)

Simonetta (207550) | more than 6 years ago | (#23146014)

Open Source actually does have serious problems, but taking money from secret-code companies is not one of them.

The biggest problem with open source is the assumption on the part of the code writers that the users know as much about the code subject that they do. In other words, a serious lack of documentation oriented towards users who aren't going to be contributing to the code upkeep, who don't care how it works, and simply want to use the code as a tool to get a particular job finished quickly and easily. And with open source, the more specialized the application that it was written for, the more likely that the user interface is incomprehensible and the more likely that the code authors assume that the users know as much as they do.

These problems exist in commercial code but they get solved much quicker because the code's sales depend on its ability to be effective and to be easily used. Open source programs get presented and distributed as completed 'products' when their level of completion is roughly half of what commercial code presents for the same solution.

Basically the value of the money that you save by using open source is more or less equal to the time that you have to spend researching and learning all the things that the code's writing group assume that you already know.

For example, take a program to edit video copied from a DVD. The commercial code is expensive, but relatively easy to use and has extensive Help sections. The open source versions are screens full of randomly placed buttons and selection boxes that are labeled with acronyms. Help files, if they exist at all and are not simply URLs, are written with the assumption that you are already a professional digital video editor.

And yet open source advocates will claim that the programs are equal in ability because a skilled and experienced professional can figure out how to get them both to work.

These problems are much less in the open-source applications that attempting to position themselves as direct competitors to commercial software: programs like GIMP, LINUX, and OpenOffice. In a few cases, like FireFox, the open source is as transparently good as (to the average user, to the power user, they are much better than) the Windows browser.

The idea that there is a financial number that quantifies the extent that open-source has directed sales away from from commercial software is absurd. The numbers that they cite have been (to coin a phrase) 'pulled out of their ass'. Completely meaningless. The more open source software that becomes available, the more that the management of commercial software companies will have to understand that they are providing a support service and not a tangible product.

Intellectual Property (1)

baalz (458046) | more than 6 years ago | (#23146056)

So, since the concept of intellectual property exists solely to incentivize the creation of *stuff*, how exactly can you justify the patents/copyrights for all those "lost" sales?

Good news for business! (1)

sloth jr (88200) | more than 6 years ago | (#23146084)

Excellent! $60 billion that can be used to build business, rather than sunk into proprietary software.

sloth jr

This just in... (0, Redundant)

CODiNE (27417) | more than 6 years ago | (#23146144)

Bicycles cost automobile industry $30 BILLION DOLLARS in lost revenue. The damage done by walking is incalculable.

Remember! If it walks... it's a terrorist.

Probably Redundant, but needs to be said (1)

Evets (629327) | more than 6 years ago | (#23146156)

An associated issue with open source is paradigm exposure.

How many people out there would really know SQL if it weren't for open source databases? The end user base has grown significantly because of it - but also the knowledge within the development community. If it weren't for open source, the closed source vendors would have a much smaller pool of potential employees and they would be paying larger salaries to less qualified people.

The same holds true for countless other horizontal markets.

Open Source drives people in a way that no University can. It opens up a learning environment to people who otherwise would not be interested in pursuing things. Sure, if you can't make a product better than an open source one, it hurts - but if that's the case, the value of the intellectual property your company has invested in is much lower than you realized.
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